Multifamily Loan Comparison

0:00 Banks are Tightening Lending Terms
1:10 Local Bank Loan
2:29 Fannie Mae Apartment Loan
4:41 DSCR Loan (Debt Service Coverage Ratio)
6:55 Local Bank Loan Example
9:47 Fannie Mae Example
13:02 DSCR Loan Example
14:30 Pop Quiz: Which loan would you choose?

[cautiousshaw]

Since the Exit Strategy is to hold long term I would choose C - DSCR, 30-years fixed. The other two are due in 7 years.

[AbdulBayaz]

Great video Peter as always.
I choose option B!

[MauricioR]

B, Fannie Mae. best rate, assumable ( good since there is an investor) and it's good for long term

[seamus]

Hi Peter, thanks again for a super informative, information packed video, with a bonus take action challenge, love it! For the deal that you gave us, I’d have to say Fanny Mae all the way. 1.35m sufficiently exceeds the minimum loan requirement, increasing likelihood of loan approval, especially with the experienced investor in the syndication, Fanny Mae offers the lowest interest rate, the motivation of purchase is for long term investment and finally if anything changes or there’s a need to back out, loan is assumable and is non recourse so no need to personally guarantee.

[BloodBankGame]

Perfect video for what I'm going through!! Thanks! I love always learning more about these programs

[robertoinvests]

B
Much better terms
Nonrecourse
Better ROI because of the interest only giving room to make improvements and force appreciation for better investor returns.
According to the purchase price you may not have enough money for options requiring 25% down or more because you have to figure in closing costs as well.
..you also mentioned, it’s a good neighborhood which probably means the market cap rate is relatively low, in which case options A and C may not meet DSCR requirements… unless the deal cap is much higher than the market cap…

Thank you!!

[DouglasFodor-kx]

I would choose B, Fannie Mae. for the stability, lower int.rate, even though refinancing will be necessary in 7 yrs.l;

[mr.incredible]

Great information. I’d choose A local bank

[deltadigger]

Option b if both parties have good credit and income verification. Option a if would probably work best.

[christsaves]

(Quick Question)

So DSCR is recourse?

I thought it was nonrecourse because they ONLY look at the property!

[jeruselahefzi]

Would I choose the DSCR LOAN? BECOZ IT DIESN REQUIRE EXPERIENCE AND YOU CAN KEEP ME FIR LONG TERM THEN UOU HSVE THE STEP DWN PENALTY TO CHOOSE FROM AND PERSON GUARANTEED IS THIS RIGHT?

[humbleguy]

I would choose option B. It provides more flexibility with the interest only for the first couple of years, which allows the investor to maximize the rent and stabilize the property.

[rileysmith]

Fannie Mae loan would be best as it’s assumable and low int rate and non recourse

[rpietryk]

I need help on understanding balloon payment specifics on 30 yr fixed. Please and thank you

[McSlinkyTB]

How is the DSCR loan recourse if they don’t look at your personal income?

[otisussery]

You" Sir" Are Ingredibly SMART!"

[briancarter]

Based on your statements. Fannie Mae would be the best loan for the lowest interest rate. B.
I would try to create a unique deal. So I would automatically do something extra. You didn't say anything about 1031 option.

Could you try to purchase outright and then get a low interest secured loan that you have leverage. It might create better options but might open more opportunities and thus you could create more than one exit strategy.

Does this make any sense? Because if you raise the money refinance and pay back investors you essentially have the lowest rate on the market. You gave examples of:
1. 7%
2. 6%
3. 8.5

Refinance is probably 3% or 4%.

I think the answer you were looking for was b. With investors you have experience and generally seek best terms.

Please rate my response

[janellmagdaleno]

Hi, I’m looking to grow my portfolio with a multi family property with 5 - 8 units. Do you think Fannie Mae would be a good route for me to take since I already have several single family rentals and one duplex? I’m looking for a lower interest rate loan for a longer term.

[Cyber_Samurai]

The DSCR loan would be more attractive if it were non-recourse.

[seanm]

All 3 would be deal and buyer specific.